The focus of Hong Kong companies, which enter Chinese mainland property management market under the Closer Economic Partnership Arrangement, will gradually expand to the middle-level residential market, say executives of those Hong Kong property management firms already in Shanghai.

In contrast, these firms, which entered the property management market earlier, confined themselves mainly to the high-end sector.

More 2,500 companies vie for business in Shanghai’s property management market, which is estimated at 10 billion yuan. However, about 10 firms are from Hong Kong currently.

"Hong Kong has more than 200 property management companies," said Sun Guoling, chairman of Hong Kong Property Management Companies’ Association. "Under CEPA, more are vying for a stake in the mainland market. The booming real estate industry provides opportunities for them."

Meanwhile, the public bidding system adopted in selection of property managers also helps overseas firms to tap the market.

Starting this year, home owners have the right to choose the property management company they want to run their estate. Previously, the developers used to appoint their own subsidiaries to provide management services for the estate.

Currently, most Hong Kong property management firms provide management services to office buildings, and they are not so visible in the local residential sector.

"It’s hard for overseas property management companies to get clients from residential projects because of their higher charges," said Wang Hui, marketing manager of Guardian Property Service (Shanghai) Co Ltd. The company is the largest property management service provider in Hong Kong.

"While the office buildings offer a higher profit margin, we also aim to expand to the much larger residential property management market," Wang said.

"But higher charges have seen us confined to the high-end market presently. Only the luxury apartments and villa developers will choose us."

For instance, the monthly management fee of villas is about US$1 per square meter, while that of luxury apartments is 4 yuan (US$0.48) to 5 yuan per square meter.

In comparison, local companies charge a monthly average of 0.8 yuan per square meter.